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Rubicon files for $100m offering

Sapphire wafer manufacturer Rubicon looks to the US stock exchange in a bid to raise funds for expansion and to pay off a loan.

Rubicon Technology, the US maker of sapphire substrates, is seeking to raise $100 million through an initial public offering (IPO) of its stock on the Nasdaq global market.

The company s sapphire wafers are used to make high-brightness LEDs, blue laser diodes and silicon-on-sapphire RFICs, and Rubicon has seen a sharp increase in sales in recent months.

In April this year, the Franklin Park, Illinois, firm agreed a $16 million loan from Hercules Technology Growth Capital to help fund a 30,000 ft2 expansion in support of that increasing demand.

However, with only $3.6 million in cash and cash equivalents on its balance sheet as of June 30, 2007, and working capital becoming tight, Rubicon says that it intends to use some of the potential IPO proceeds to pay off that loan.

In the first half of 2007, Rubicon s sales jumped sharply to reach $15.5 million - nearly double the figure recorded for the first half of 2006.

The company was also able to post its first operating profit of $1.9 million, having operated at a significant loss during the 2004-2006 period.

If successful, the $100 million IPO would bolster Rubicon s finances and allow it to capitalize on some fast-growing applications.

Rubicon CEO and president Raja Parvez, formerly the chief operating officer at InP optoelectronics specialist CyOptics, will be hoping that the HB-LED and blue laser markets continue to expand at their current rates.

While 2 inch and 4 inch diameter sapphire provides for the bulk of Rubicon sales, the company also ships 6 inch material that is used to make silicon-on-sapphire RFICs, such as high-performance cell phone switches made by Peregrine Semiconductor. However, Rubicon s biggest customers at the moment are listed as Crystalwise Technology, Shinkosha and Tera Xtal.

According to Parvez s S-1 filing with the US Securities and Exchange Commission (SEC), the Rubicon strategy includes further increasing crystal boule size to support even higher-volume chip manufacturing, as well as applying its proprietary manufacturing technology to other single-crystal materials.

If floated successfully, Rubicon will appear on the Nasdaq global market under the ticker name "RBCN".

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